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Dissecting The Evils of Corporate Ownership

By Charles Olken

It does not take much sleuthing to figure out that many of the largest wine companies in California are in the hands of the families that started them. Sure, there are the Diageos and the Constellations, the Chateau Ste. Michelle group and Treasury (Beringer et al) in that list of big organizations, but so too are there Gallo, Jackson Family, Trinchero (Sutter Home) and a batch more.

It is true that corporate ownership does come with certain constraints, but I am not all that sure that those constraints are very different for the winemakers for the Gallo conglomerate than they are for the Diageo conglomerate. And the way I choose to measure the effects of those constraints are on the wines being produced.

I have heard it said by winemakers at Diageo that they cannot always do what they want. That they must make wines for certain price points and within certain cost constraints; that they cannot skip bad vintages; that they cannot always buy as many new barrels as they would like. And I got to thinking. Is that so very different from Trinchero or Jackson? Or even from mid-sized wineries?

It turns out that the answers are “not really”. Yes, if one is making top of the lines wines like Phelps Insignia or Jackson’s Verite’, you can be sure that those winemakers have not been asked to pull any punches. Make the best wine possible and the company will sell it—for a three-digit price.

In my hometown of Alameda, there was a winery not so long ago by the name of Rosenblum Cellars. Kent Rosenblum and his minions got to be very famous for making Zinfandel about as well as anyone in California. But they got rich by making tens of thousands of gallons of a low-priced Zin whose popularity all but took over the winery. And then they sold to Diageo. That Diageo has not kept the quality at the same level can be considered to be one of the evils of corporate ownership, but, in truth, Diageo did not buy Rosenblum for its limited production efforts but for its long-production items.

The Rosenblum folks, for their part, started a new winery called Rock Wall. It is thriving just fine, thank you, and in truth, it does have a hominess, a real personality that goes beyond corporate. But, I am not sure that the Rock Wall wines are any better than the Ravenswood top-end wines coming from the Constellation corporate family. And, interestingly, both corporate Ravenswood and family-run Rock Wall have two of the most personal, enjoyable tasting rooms around.

And, it is further true that Rock Wall has been faced with the perils of being a business. It must sell what it makes and it must pay its bills. It may not be corporate, and the folks making the decisions are but a handful, not a busload, but Rock Wall has not had a free ride just because it is not corporate.

When it comes to wine, it is not the ownership that determines if the wine is good or bad, is worth the money or not, but the entire panoply of ownership, winemaker and vineyardists. Connoisseurs’ Guide has recommended more than a handful of Gallo wines to its readers since we began because those wines impressed. And the same is true for the wines of Constellation and Treasury and Diageo.

Just as wine is not to be judged solely by factors that have little or nothing to do with taste, such as biodynamics or alcohol level, so too is wine not be judged by its ownership. It is still wine, after all, and it is to be judged by its taste and by its value for the price asked.


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by TomHill
Posted on:5/12/2015 9:42:56 AM

Interesting, Charlie...that you should make the comparison between corporate-owned Ravenswood and family-owned Rockwall. I would agree at the top-end line of Zins, there's not been much of a slip on the Constellation/Ravenswood side, that I can tell; though I find the Rockwall top Zins a bit more interesting.

   But the big difference is that Rockwall also produces Fiano/Teroldego/Norton (!!)/Tannat and Zins from a bunch of different/interesting  vnyds/regions in Calif. Try getting something like that by the Constellation BoD!!

BTW: Have you seen the Diageo Rose 'N Bloom Pink Moscato?? Poor Kent must be turning over in his grave over that one!! Were he there yet.



by Charlie Olken
Posted on:5/13/2015 1:13:41 AM

Hard to believe, but Rock Wall is certainly willing to try lots of small lots just for the fun of it.


Giant company dynamics
by Randy Caparoso
Posted on:5/13/2015 9:27:42 AM

Nicely and delicately put, Charlie. But let's face it:  corporate ownership *can* (not always) be "evil" simply because at a certain point pure quality is much less a goal than consistency, packaging, pricing, distribution, et al.  Because of sheer scale of what they do, giant family owned wineries (starting with E. & J. Gallo) must operate under the same constraints as corporate owned operations.

Yet we all know that many of the giant sized companies produce wines that are of superior quality compared to many medium or micro-sized producers.  We experience that time and time again in blind tasting competitions.  Big or small, it still takes talent to achieve quality; and quite often, superior equipment, manpower and grape access "wins" out.

At the same time, it is not feasible for giants to bottle niche wines like Teroldego, Fiano, etc. because there is no place in large scale product lines for them.  Ironically, bigger wineries purchase more of these lesser known grapes than smaller wineries, but utilize them for blending and/or experimentation. But the fact that these "alternative" grapes are out there, even if primarily for the giant producers, is also what benefits the smaller producers who can actually venture into bottling this and that as varietals.

Living in Lodi, I am seeing this dynamic work first-hand, and it's a good thing:  byproducts of corporate wine company management invariably leading to fun, interesting stuff for consumers who eschew the usual array of grocery store products.

You Live Where?
by Charlie Olken
Posted on:5/13/2015 7:36:11 PM

Lodi is a repository of limited production grapes, and, for those who would rather drink a Torrontes rather than another Chardonnay, Lodi's vineyards are a godsend.

But, Randy, what are you doing in Lodi? Nice place to visit, except in mid-summer, but not exactly the heart of the fine wine industry--or a high point in most sommeliers' dreams.

by Adam Lee
Posted on:5/19/2015 7:04:44 AM

A few, somewhat scattered, thoughts:

1) I like that amongst California's largest wineries you can still count a number of family-owned wineries -- such at Gallo, Trinchero, and Jackson.

2) Randy, I get your point that consistency can become more of a goal than quality at some of the larger corporate wineries.  That's certainly possible (and undeniably happens sometimes).  I wonder if that is all bad.  In a country which ranks 52nd in per capita wine consumption, perhaps we need more consistent, value priced wines that appeal to those that are currently non-wine drinkers.  If that were the case, and more people were brought into the wine drinking family, then I think all wineries would benefit.

Adam Lee

Siduri Wines

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